The Hindu Business Line : Domestic shipping cos signal move to bid for Petronet LNG deal

LEADING domestic shipping companies such as Shipping Corporation of India (SCI), Great Eastern Shipping Company Ltd and Varun Shipping have announced their intentions to bid for the LNG shipping contract of Petronet LNG Ltd (PLL).

Petronet has floated global tenders for pre-qualification of bidders for long-term time chartering of ships of 1,38,000-1,65,000 cubic metre capacity for shipping LNG to Dahej in Gujarat and Kochi in Kerala.

The domestic ship owners, however, will have to forge tie-ups with reputed LNG operators to comply with the condition stipulated by PLL that prospective bidders should have owned and operated LNG ships of similar capacity for the last three years and also possess full experience in both technical management and crewing of the LNG tankers.

SCI, the only domestic entity to have successfully ventured into LNG shipping so far, has " not yet decided" on whether to bid for the new contract with the same Japanese consortium of Mitsui O.S.K Lines, NYK Line and K Line that had clinched the deal for hauling 5 million tonnes of gas from RasGas in Qatar to Dahej by deploying two 1,38,000 cubic metre each LNG carriers.

At the same time, it is also doubtful whether SCI can bid for the project on its own given the qualification criteria set by Petronet.

"It is a grey area. But, if you count the Dabhol experience and the initial deal of Petronet, we may be able to bid on our own. But, eventually, we will bid for the project in a consortium," says Mr S. Hajara, Director (Personnel & Administration), SCI.

The public sector company had a 20 per cent stake in the LNG carrier `Laxmi' that was to transport LNG to Dabhol Power Company. But, following the collapse of Dabhol, SCI had to sell its stake in `Laxmi' to the Government of Sultanate of Oman.

Mr Hajara said that SCI would also be looking at bidding for the project in more than one consortium like it did for the first LNG shipping tender of Petronet. "It all depends on what the pre-qualification documents says," he said.

GE Shipping, the largest private domestic shipping company, also said that it would bid for the project in partnership with an experienced LNG operator. "GE Shipping is scouting for partners to bid for the project and will announce a tie-up at an appropriate time," Mr Rajat Dutta, General Manager (Planning), told Business Line.

Varun Shipping, yet another leading domestic ship owner, has also decided to join the fray with a foreign partner. "We will definitely link-up with somebody," Mr Arun Mehta, Vice-Chairman and Managing Director, Varun Shipping, said.

On the other hand, foreign LNG operators, will have to locate an Indian shipping partner to bid for the project in view of the recent guidelines issued by the Director-General of Shipping for chartering LNG vessels into the country.

According to the DG norms, no licence will be granted for chartering an LNG vessel unless it flies an Indian flag and the Indian partner owns the tanker either fully or own not less than 26 per cent of the ownership of the company owning the LNG ship.